A clean energy future

Pricing pollution will encourage new investment in cleaner energy, such as renewables, and more efficient use of electricity.

A clean energy future requires major changes to the electricity sector.

Electricity generation accounts for around one third of Australia's emissions. Without a carbon price, emissions from electricity generation are projected to increase by more than 60 per cent over the next 40 years.

A carbon price is projected to reduce electricity emissions 60 per cent below current levels by 2050, as industry and households improve energy efficiency and generators switch to lower emission technologies.

Over time, the electricity sector will move away from coal-fired generation to renewables, with renewable energy growing from 10 to 40 per cent of the generation mix by 2050, and conventional coal-fired generation falling from 70 to below 10 per cent of the generation mix by 2050.

This will drive around $100 billion in investment in the renewables sector over the period to 2050.

Output from the renewables sector, excluding hydroelectric, will grow by over 1700 per cent to 2050.

Once commercially viable, carbon capture and storage (CCS) technology will deliver significant emission reductions, comprising almost 30 per cent of generation by 2050.

Of course, the exact mix of generation will depend heavily on a range of uncertain factors, including the cost of new technology and the price of energy commodities like gas.